A potential property tax increase is being considered by city officials in Toronto in response to a significant funding shortfall in housing support from both provincial and federal governments. Mayor Olivia Chow has highlighted a drastic reduction in the funding allocated to Toronto under the Canada-Ontario Housing Benefit (COHB), with the province set to provide less than $8 million next year, down from nearly $20 million received in 2025.
Chow voiced her concern, stating, “This means the single most effective tool to free up shelter spaces, to take people off the streets and into homes, are being undermined by other levels of government because they’re not stepping up.” The COHB is crucial as it subsidizes rent, which helps those in shelters transition to rental housing more swiftly, ultimately freeing up space in the shelter system.
This funding reduction adds to the city's challenges, particularly in light of a recent refugee shelter funding offer from the federal government that leaves Toronto with a $107 million deficit for the current year. Mayor Chow pointed out the dilemma facing the city: “We can either stop sheltering refugee claimants, leave them on the street, which would love homelessness worse… or Torontonians will have to pay for it through their property taxes. Neither is fair.”
During the discussions, Councillor Shelley Carroll expressed the urgency of the situation, noting, “We’ve already served people assuming that money would be there by the end of the year. So there’s an immediate problem.” Mayor Chow has projected that Toronto will face a total shortfall of approximately $153 million next year due to these cuts.
To address this funding gap, Mayor Chow estimates that a property tax increase of about three percent may be necessary; however, both she and the city’s budget chief are keen to avoid this increase and prefer a response from the higher levels of government. Councillor Gord Perks emphasized the systemic effects of a strained shelter system, saying, “When our shelter system is bursting at the seams, that affects our transit system, it affects our libraries, it affects our parks. It also means we have to make cuts in other parts of the city budget to fill the hole the federal government has created.”
At a recent executive committee meeting, advocates also raised their voices against the funding cuts, warning of severe consequences for vulnerable populations. Reverend Eddie Jjumba, affiliated with the Milliken Wesleyan Methodist Church, which has been instrumental in providing housing for refugees, expressed his disbelief, stating, “I could not picture the federal government doing something that they know guarantees a negative outcome. So it shocked me.”
Diana-Chan McNally, a housing advocate, criticized the transfer of responsibility for refugee housing from the federal to local government. She stated, “Refugees are always a federal responsibility and the fact that they’re foisting this upon the city, and frankly upon citizens like myself who will absolutely provide relief to people if that’s needed. That’s egregious.”
In response to these concerns, the Office of the Minister of Municipal Affairs and Housing stated that funding from the province, including for Toronto, is calculated annually through a standard formula, insisting that this formula remains unchanged and that their investment remains intact. On the other hand, the federal government remarked that their funding reductions reflect a decrease in the number of refugees arriving. However, both advocates and city officials contest this claim, labeling it as fundamentally inaccurate.
